Categorized | Government, News

Governor raises retirement age to deal with dwindling pension fund


Honolulu – Governor Neil Abercrombie signed into law House Bill 1038, which begins to address the state’s unfunded liability for its retirement system and helps ensure its long-term viability.

“We are addressing the very same problem that many other states are struggling with. It’s a problem which represents a growing burden on governments and taxpayers,” said Kalbert Young, Director of Department of Budget and Finance. “This measure will help curtail and minimize the future growth in the overall pension liability. This action is the first phase in our overall strategy to tackle the underlying reasons for growth in the state’s long-term pension liabilities.”

Currently, the state’s liability for the Employees Retirement System (ERS) is approximately $7 billion. To address this rising cost, among other things, this Act will affect future employees by:

  • Raising the retirement age for certain new employees from 55 to 60 years old, and for most others from 62 to 65 years old
  • Increasing the number of years for state employees to be “vested” to receive retirement benefits from five years to 10 years.
  • Raising the employee and employer contribution rates

“This measure will assist the ERS to achieve a better-funded status,” said Wesley Machida, ERS Administrator. “However, the ERS and its Board of Trustees recognize that this is not a complete solution. It will have to be closely monitored and evaluated, annually, to ensure that necessary measures are taken to ensure the financial sustainability of the system. This is a good start.”

Governor Abercrombie also enacted 12 other laws today. They include:

  • Senate Bill 142 requires the Board of Land and Natural Resources to consider dams and reservoirs as important water resources for the State.
  • Senate Bill 14 expands the authorized uses of the Agricultural Development and Food Security Special Fund to include the improvement of dams and reservoirs, and water quality testing and improvement.
  • Senate Bill 1328 increases the motor vehicle registration fee from $25 to $45 and to deposit a portion into the general fund.
  • House Bill 200 appropriates funds for the operating and capital improvement budget of the Executive Branch for fiscal years 2012 and 2013.
  • House Bill 1020 revises the boundaries of the Aloha Tower complex and places the Aloha Tower Development Corporation under the Department of Transportation for administrative purposes.
  • House Bill 117 expedites and facilitates work on construction projects within Special Management Areas.
  • House Bill 555 extends the area applicable to graffiti removal from 100 yards to 250 yards and allows the court to require 100 hours of community service in lieu of graffiti removal.
  • House Bill 593 requires candidates for county elective office to submit a sworn certification that the candidate has complied with the relevant provisions of the county charter and county ordinances.
  • House Bill 960 establishes a program for granting low-income housing tax credit loans in lieu of housing tax credits. There is already $7 million appropriated for this function in the state budget.
  • House Bill 1368 clarifies the filing process of nomination papers and also defines a party candidate and modifies the withdrawal process for a party candidate.
  • House Bill 1434 clarifies that a single violation of the prevailing wage law refers to each separate project where the Department of Labor and Industrial Relations finds a contractor in violation of Hawaii Revised Statutes Chapter 104.
  • House Bill 1447 amends provisions in the Permitted Transfers in Trust Act (Act 182, SLH 2010) to strengthen Hawaii’s trust laws and allow Hawaii to compete with other states in this growing industry.

For more information on these or all measures that have been signed into law, please visit

Governor Abercrombie continues to review legislative bills that he must either veto or sign into law by July 12, 2011.

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